Dell Technologies slashes revenue forecast

Dell Technologies cut its full-year revenue forecast on Tuesday as its PC business grapples with a shortage of chips from Intel.
Dell Technologies business drivers
The company cut its fiscal 2020 revenue forecast to between $91.5 billion and $92.2 billion from between $92.7 billion and $94.2 billion.

Dell is the third-biggest PC maker after China’s Lenovo Group and HP. Dell’s PC business accounts for nearly half of its total revenue.

“Intel CPU shortages have worsened quarter-over-quarter, impacting our commercial PC and premium consumer PC Q4 forecasted shipments,” Dell chief operating officer Jeffrey Clarke said on a post-earnings call with analysts.

Intel said last month that demand for its processors used in PCs was outstripping its ability to add capacity, prompting it to rely on contract manufacturers to ease shortage.

Dell’s PC business sales rose 4.6 percent to $11.41 billion. Total revenue – printing and PC — of HP rose marginally to $15.41 billion.

Revenue from Dell’s server and networking unit dropped 16 percent to $4.24 billion in the third quarter ended Nov. 1.
Dell Technologies infrastructure business Q3 2019Sales in its VMware unit rose 11.4 percent.

The PC maker said excluding China, its server business was down mid- to high-single digits in the quarter and that demand for servers will “remain challenged”.

The Texas-based company reported revenue of $22.84 billion for the latest quarter.

Dell’s net income was $552 million, compared with a loss of $895 million a year earlier.